Merger Control 2019

Netherlands

Authors

Loyens & Loeff
is a legal and tax partner to its clients in its home markets of the Netherlands, Belgium, Luxembourg and Switzerland. Its 900 advisers are based at the firm's offices in Benelux and Switzerland, as well as in key financial centres around the world. A full-service practice with specific sector experience and a thorough understanding of the market, its advisers offer clients informed and tailored solutions. The Loyens & Loeff EU competition team consists of approximately 30 specialised lawyers (partners, counsels and associates) who combine pragmatic advice with in-depth knowledge of the sectors of competition law in which they are active, while taking into account their clients’ business objectives. The firm's EU competition team provides fully integrated legal services.

1. Legislation and Enforcing Authorities

1.1 Merger Control Legislation

The Dutch merger control regime is laid down in Chapter 5 of the Dutch Competition Act (Mededingingswet). This chapter is closely modelled along the lines of the EU Merger Regulation (EUMR) No 139/2004. Therefore, the Dutch competition authority, the Authority for Consumers and Markets (ACM), tends to follow the European Commission’s Consolidated Jurisdictional Notice (OJ C95/1) under the EUMR in most cases. Various procedural rules are laid down in the Dutch General Act on Administrative Law.

The ACM has published several merger control guidance documents, the most important being its 'Best Practices on Merger Control Cases' (Spelregels bij concentratiezaken). In addition, the ACM has issued 'Remedies Guidelines' (Richtsnoeren Remedies) which are closely modelled on the European Commission’s Notice on Remedies (OJ 2008/C 267/1). These guidelines address various procedural and material aspects of remedies. Lastly, although the ACM may deviate from its precedents, it often relies on own-decision precedents and market definitions used in other cases provide useful guidance as well.

In a specific case, informal guidance from the ACM may be obtained by way of an informal written opinion (informele zienswijze) and/or in pre-notification meetings. An informal written opinion will generally be issued by the ACM if:

there is uncertainty regarding the ACM’s jurisdiction over a particular case; and

such uncertainty is not so complicated as to require a formal decision from the ACM.

The informal written opinion is often given within two weeks after the request has been made, provided that sufficient information is provided to the ACM. The ACM publishes public versions of its informal opinions in anonymised form. With respect to pre-notification meetings, see 3.9 Pre-notification Discussions with Authorities.

1.2 Legislation Relating to Particular Sectors

The Netherlands does not currently have a general foreign direct investment (FDI) screening mechanism. However, this may change in the near future. EU Regulation 2019/452 (OJ L 79I/1) has been in force since 10 April 2019 and allows EU member states to set up a national FDI screening mechanism, as well as enhancing co-operation in this area between EU member states and the European Commission. EU member states must take the necessary steps to ensure that the EU can apply the regulation as of 11 October 2020. A bill for a screening mechanism for the telecom sector, known as the 'Bill on undesirable control of telecommunication' (Wetsvoorstel ongewenste zeggenschap telecommunicatie), is already pending in the Netherlands.

Since 2014, both national and foreign undertakings have been under obligation to notify a concentration in the healthcare sector to the Dutch Healthcare Authority (Nederlandse Zorgautoriteit or NZa) if at least one undertaking concerned employs 50 people or more to provide healthcare services in the Netherlands, as defined in Article 1(1)(c) of the Act on Healthcare Market Regulation (Wet marktordening gezondheidszorg). The NZa will investigate (in brief) whether the decision to enter into the proposed concentration was the outcome of a thorough decision-making process and whether all the relevant stakeholders (patients, employees, healthcare insurers) have been properly involved in the process. It is important to note that the approval of the NZa should be obtained before submitting the merger control filing to the ACM.

1.3 Enforcement Authorities

The ACM is charged with enforcing Dutch competition rules.

Policies regarding competition are set out and published by the minister of economic affairs. This minister could also eventually grant a permit in the third phase, should the ACM refuse to grant a permit (see 4.6 Non-competition Issues).

2. Jurisdiction

2.1 Notification

Notification is compulsory if the turnover thresholds are met. The Dutch Competition Act does not provide for any exceptions to the obligation to notify. If the turnover thresholds are met, filing is compulsory.

2.2 Failure to Notify

If the parties involved fail to notify a concentration above the applicable thresholds:

the ACM may impose a fine of up to EUR900,000 or 10% of the annual group turnover of the purchaser(s) (or parent companies in the case of a greenfield joint venture), whichever is higher;

the transaction is deemed null and void (Article 3:40(2) of the Civil Code);

the ACM may order the parties to cease and/or dissolve the concentration if it concludes (after regular, retroactive notification proceedings) that the concentration leads to a significant impediment of competition; and

personal fines of up to EUR900,000 may also be imposed on the individuals who factually led the infringement (feitelijk leidinggevers).

The ACM generally imposes a fine (on the purchaser) where a concentration is (partially) implemented prior to obtaining clearance, even in cases where parties inform the ACM of their own accord of their omission to obtain timeous clearance. In 2013, for example, the ACM imposed a fine on Motorhuis (case 7491) when it notified a concentration which had already been implemented. We are unaware of any more recent precedents.

Merger control decisions, including decisions imposing penalties, are always published by the ACM.

2.3 Types of Transactions

The merger control regime applies to concentrations. A 'concentration' is defined in the Dutch Competition Act as:

a merger of two or more previously independent undertakings;

the acquisition of control by one or more undertaking(s) over the whole or parts of one or more other undertaking(s); and

the creation of a joint venture that performs all the functions of an autonomous economic entity on a lasting basis.

Internal restructurings and reorganisations are not regarded as a concentration if these do not amount to a change of control, eg, the restructuring takes place within the same economic unit.

It is not only the transfer of shares or assets that qualifies as a change of control. Each factual or legal ability to exercise decisive influence over an undertaking amounts to control. Therefore, other means of control (such as shareholders’ agreements and/or other contractual arrangements) fall under the purview of the Dutch merger control regime, as they do under the EUMR.

2.4 Definition of ‘Control’

The Dutch definition of 'control', as laid down in Article 26 of the Competition Act, is highly similar (and in practice often identical) to the European definition of control included in the EUMR and the Consolidated Jurisdictional Notice. The definition reads as follows: “the ability to exercise decisive influence on the activities of an undertaking, either on the basis of factual or legal circumstance.” Deciding whether a party has the ability to exercise decisive influence depends on whether it can influence important strategic decisions such as the appointment or dismissal of senior management, the annual budget, the business plan and/or major investments.

Acquisitions of minority or other interests are only covered by this definition in cases where these amount to a change of control. Again, the same principles as under the EUMR apply.

2.5 Jurisdictional Thresholds

A concentration requires the prior approval of the ACM if in the preceding calendar year:

the aggregate worldwide group turnover of all undertakings concerned was EUR150 million or more;

the individual group turnover in the Netherlands of each of at least two of the undertakings concerned was EUR30 million or more; and

the concentration did not fall under the purview of the EUMR (had it done so, the European Commission would have been the sole competent authority).

Save for the exceptions mentioned below, no notification is required for a concentration below these thresholds. However, pursuant to Article 29(3) of the Dutch Competition Act, the minister of economic affairs may (temporarily) lower the thresholds for certain categories of undertakings by decree.

Lower turnover thresholds apply for undertakings active in the healthcare sector. Such concentrations must be notified and approved by the ACM prior to their implementation if in the preceding calendar year:

at least two of the undertakings concerned each individually achieved a group turnover of EUR5.5 million or more through the provision of healthcare activities as defined in the relevant decree;

the aggregate worldwide group turnover of all undertakings concerned was EUR55 million or more; and

the individual group turnover in the Netherlands of each of at least two of the undertakings concerned was EUR10 million or more.

2.6 Calculations of Jurisdictional Thresholds

Turnover figures must be calculated according to the provisions of Article 30 of the Competition Act, which is highly similar to Article 5 of the EUMR and the Consolidated Jurisdictional Notice. Turnover is defined as income from the supply of goods and services by the business of the legal entity after the deduction of rebates, tax and inter-group turnover. According to an informal opinion of the ACM published in 2011, the turnover may be calculated based on Dutch General Accounting Principles (Dutch GAAP) or International Financial Reporting Standards (IFRS).

The turnover of banks and financial institutions is calculated in a different manner. Pursuant to Article 31(1) of the Dutch Competition Act (and in line with Article 5(3) of the EUMR) the sum of the following revenue sources should be considered as the relevant turnover (after deduction of value added tax and other taxes directly related to these revenue sources):

interest and similar income;

revenue from securities;

commissions received;

income from financial transactions; and

other operating income.

With respect to pension funds within the meaning of the Dutch Pension Act, the Dutch merger control regime is triggered if:

the undertakings involved generated at least EUR500 million in gross written premiums; and

at least two undertakings received at least EUR100 million of the aforementioned amount from Dutch residents.

Sales booked in a foreign currency should be converted using the average rate in the respective preceding calendar year, as published by the Dutch Central Bank (De Nederlandsche Bank) on www.dnb.nl.

2.7 Businesses/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds

The turnover figures of the undertakings concerned are relevant for the purpose of calculating the jurisdictional thresholds. The definition of ‘undertakings concerned’ is similar to the European definition as included in the Consolidated Jurisdictional Notice.

The seller’s turnover does not need to be included with that of the target, provided that, after the transaction, the seller does not retain (joint) control.

The following turnover must be taken into consideration:

a) the turnover of the undertaking concerned;

b) the turnover of those undertakings in which the undertaking concerned, directly or indirectly:

owns more than half the capital or business assets, or

has the power to exercise more than half the voting rights, or

has the power to appoint more than half the members of the supervisory board, the administrative board or bodies legally representing the undertakings, or

has the right to manage the undertakings' affairs;

c) the turnover of those undertakings which have, in the undertaking concerned, the rights or powers listed in (b);

d) the turnover of those undertakings in which an undertaking as referred to in (c) has the rights or powers listed in (b); and

e) the turnover of those undertakings in which two or more undertakings, as referred to in (a) to (d), jointly have the rights or powers listed in (b).

Each change in turnover through acquisitions, divestments and/or business closures after the end of the relevant calendar year prior to the implementation of the transaction (‘closing’) should be taken into consideration.

2.8 Foreign-to-foreign Transactions

Foreign-to-foreign transactions are subject to merger control in the Netherlands if the turnover thresholds are exceeded. Dutch merger control does not require local effect and/or presence. A concentration falls under the purview of the Dutch merger control regime when the turnover thresholds are exceeded.

In cases of acquisition of sole control, no filing is required in the Netherlands where the sales of either the target entity or the acquiring party in the territory of the Netherlands remain below EUR30 million (or EUR10 million if the lower thresholds for the healthcare sector apply; see 2.5 Jurisdictional Thresholds). Where the turnover thresholds are exceeded, a notification is required irrespective of whether the target company has any assets or other physical presence in the Netherlands. A notification may also be required if a target – with no sales or assets in the Netherlands, or sales that are below the applicable EUR30 million or EUR10 million threshold – functions as a full-function joint venture (see 2.10 Joint Ventures, below) and if the turnover figures of the envisaged parent companies exceed the turnover thresholds. However, the substantive test applied by the ACM only relates to the effects on (parts of) the Dutch market.

2.9 Market Share Jurisdictional Threshold

No market share jurisdictional threshold applies in the Netherlands.

2.10 Joint Ventures

The creation of a joint venture is subject to merger control, provided that the joint venture performs, on a lasting basis, all the functions of an autonomous economic entity (ie, it is a ‘full-function' joint venture). In determining whether a joint venture is full-function or not, in line with the Consolidated Jurisdictional Notice, the following factors are taken into consideration:

whether the joint venture has sufficient resources to operate independently in the market;

whether the activities of the joint venture go beyond a specific function for its parent companies;

the sale and purchase relationships with the parent companies and third parties; and

whether the joint venture operates on a lasting basis.

Joint ventures that do not qualify as full-function joint ventures do not fall under the purview of the Dutch merger control regime, but their effects on competition need to be assessed under the cartel prohibition, as laid down in Article 6 of the Competition Act.

The general rules for calculating turnover are also applicable to full-function joint ventures. However, in a situation where a target is controlled by an undertaking and as a result of the transaction this target will be controlled by this undertaking and a third undertaking, the turnover of the target is attributed to the turnover of the undertaking that currently controls the target.

2.11 Power of Authorities to Investigate a Transaction

Transactions below the thresholds cannot be investigated by the ACM.

Article 5:45 of the General Administrative Law Act (Algemene wet bestuursrecht) provides that the power to impose a fine expires five years after the infringement. Pursuant to Article 82 of the Dutch Competition Act, this time period is interrupted for a period of two years by any act of the ACM aimed at conducting an investigation or proceedings concerning the infringement.

2.12 Requirement for Clearance Before Implementation

The main rule in this regard is that the (partial) implementation of a transaction must be suspended until clearance has been obtained. There are, however, a few exemptions:

in the case of a public bid, no clearance is required, provided that the concentration is notified to the ACM promptly after the transaction has been implemented (the concentration must be dissolved again where the ACM subsequently refuses to clear the transaction), and the acquiring party does not exercise its voting rights; and

the ACM, may, upon request, grant an exemption from the standstill obligation where there are serious reasons (gewichtige omstandigheden) for such an exception (eg, financial difficulties of the target).

However, the parties are not discharged by such an exemption from their obligation to notify the ACM of the concentration prior to its implementation.

2.13 Penalties for the Implementation of a Transaction Before Clearance

If the parties (partially) implement a transaction before clearance:

the ACM may impose a fine of up to EUR900,000, or 10% of the annual group turnover of the purchaser(s) (or parent companies in the case of a greenfield joint venture), whichever is higher;

the transaction is considered null and void (Article 3:40(2) of the Civil Code);

the ACM may order the parties to cease and/or dissolve the concentration if it concludes (after regular, retroactive notification proceedings) that the concentration leads to a significant impediment of competition; and/or

personal fines of up to EUR900,000 may be imposed on individuals who have factually led the infringement (feitelijk leidinggevers).

Penalties are imposed in practice. In 2013, for example, the ACM imposed a fine on Motorhuis (case 7491) because the standstill obligation had been infringed. We are unaware of any more recent precedents.

2.14 Exceptions to Suspensive Effect

This is not applicable in the Netherlands.

2.15 Circumstances Where Implementation Before Clearance is Permitted

The Dutch Competition Act does not state whether it is possible to ring-fence or hold separate businesses and/or assets in order to allow global closing. In addition, there is no sufficiently clear case law. The undertakings may, however, consider consulting the ACM informally where they are considering implementing a ring-fencing structure with regard to the Netherlands.

3. Procedure: Notification to Clearance

3.1 Deadlines for Notification

There are no deadlines for notification. Clearance should be obtained prior to the (partial) implementation of the concentration. Consequently, the timetable of the transaction towards closing should include sufficient time for the merger control procedure.

3.2 Type of Agreement Required Prior to Notification

A binding agreement is not required prior to notification; a notification may be filed where there is a sufficiently specific intention to close the transaction. A letter of intent containing a certain level of detail, for example, should be enough to file a notification.

While a written contract is not a requirement, in the absence of any document it may be difficult to prove that the intention is sufficiently specific.

3.3 Filing Fees

A fixed filing fee for both the notification phase (Phase I) and permit phase (Phase II) is charged. The current fees are EUR17,450 for Phase I and EUR34,900 for Phase II. The filing fee is still due if the notification is withdrawn at a later stage.

The fee must be paid within six weeks from the date of the invoice.

3.4 Parties Responsible for Filing

A notification has to be filed by (one of) the undertakings concerned. All undertakings concerned remain responsible for the filing. However, fines for a failure to notify or closing before clearance (see 2.2 Failure to Notify and 2.13 Penalties for the Implementation of a Transaction Before Clearance) may only be imposed on the undertaking(s) acquiring or – in the case of joint control – retaining control.

3.5 Information Included in a Filing

Like the EU merger control regime, the Dutch merger control regime consists of two phases at the competition authority. Standard forms can be found on the website of the ACM for both Phase I and Phase II.

The following information should (inter alia) be provided in the notification form for Phase I:

the contact details of the undertakings concerned;

their legal structure;

a brief description of their (group) activities;

their Dutch, EU and worldwide turnover;

a description of the transaction and whether the amalgamation constitutes a merger, the acquisition of sole or joint control, or the creation of a full-function joint venture;

a description of the market(s) in which the undertakings concerned are active. The following elements, at least, should be covered:

affected markets and relevant market definitions;

the market shares of the undertakings concerned in the preceding calendar year in these markets;

contact details of the five most important competitors and customers;

information on ancillary restraints and a declaration as to whether the parties would like to have the opinion of the ACM on whether such restraints are allowed; and

whether other European jurisdictions will be notified about the concentration.

The following documents should be submitted in Phase I:

the most recent annual reports of the undertaking concerned;

all transaction documents relating to the concentration;

power of attorney of representatives; and

market reports.

A separate request for a permit must be filed for Phase II. In brief, the undertakings concerned are required to submit more detailed information about their activities, the (structure) of the market, market shares and market data (including competitors’ market shares), among other things, in the three previous business years.

In Phase II, the parties are required to submit strategic internal documents relating to the transaction.

The filing itself must always be drafted in Dutch, although the ACM will, in general but without guarantee, accept annexes and supporting documents (such as economic reports) in English, or even other widely spoken languages.

3.6 Penalties/Consequences of Incomplete Notification

If the ACM requests further information within five working days of receipt of the notification because the notification is incomplete, a new waiting period will commence once the notification has been completed (Article 38(1) Dutch Competition Act). If the ACM believes that a notification is incomplete or that additional information is required, it will send a request for information to the parties, upon which the waiting period is automatically suspended until all questions have been answered in full (Article 38(2) Dutch Competition Act).

3.7 Penalties/Consequences of Inaccurate or Misleading Information

Providing incomplete, inaccurate or misleading information may lead to the imposition of fines of up to EUR900,000 by the ACM, or 1% of the annual worldwide group turnover of the purchaser(s), pursuant to Article 73(1) of the Competition Act, whichever is higher.

To date, there have been no precedents in which the undertakings concerned were fined for providing false or misleading information.

3.8 Review Process

The Dutch merger control regime consists of two phases at the ACM. There is also a third phase in which the minister of economic affairs can grant the permit (see 4.6 Non-competition Issues).

The ACM must take a Phase I decision within four weeks following receipt of the notification, in which it determines whether the concentration requires a permit or not (Article 37(1) Dutch Competition Act). Unproblematic cases (no overlapping economic activities or low combined market share) are mostly cleared within this period in a short-form decision. The Competition Act also provides for automatic clearance if the ACM does not take a decision within the applicable waiting period.

In relation to this waiting period of four weeks, the following must be noted:

if the ACM requests further information within five working days of receipt of the notification because the notification is incomplete, a new waiting period will commence once the notification has been completed (Article 38(1) Dutch Competition Act);

the waiting period is automatically suspended, if the ACM formally requests information from the parties, until all the questions have been answered in full (Article 38(2) Dutch Competition Act); and

a suspension of the waiting period may be requested by the parties (eg, in order to discuss remedies). Such suspension can only be requested once; a second request is inadmissible (Article 38(3) Dutch Competition Act).

If the ACM has reason to assume that the concentration may lead to a significant impediment of competition in (parts of) the Netherlands, the ACM will refer the concentration to Phase II for further consideration. The parties are required to submit a separate request for a permit in order to initiate a Phase II investigation by the ACM. The ACM has 13 weeks to take a decision on such a request (Article 44(1) Dutch Competition Act).

During the Phase II investigation, the ACM performs a more thorough economic analysis of the concentration and its effects on the market. The ACM normally issues a statement of objections if it intends to prohibit the concentration. The parties are given an opportunity to respond to such objections and may propose remedies to address the ACM’s competition concerns.

Also in Phase II, the waiting period may be suspended by information requests from the ACM. Such suspension is not automatic (in contrast to Phase I) and the ACM must set a deadline for the parties to comply with its information requests (Article 4:5(1)(c) General Administrative Law Act). These decision-making deadlines may also be extended by the ACM, according to Article 4:14 of the General Administrative Law Act.

Unproblematic cases (without overlap in activities or low combined market share) are mostly cleared in Phase I within four weeks. More complicated cases can take substantially longer. This differs greatly from case to case.

3.9 Pre-notification Discussions with Authorities

The parties involved may request to enter into pre-notification discussions with the ACM. Usually the ACM will require a draft notification form for such discussions. Pre-notification discussions with the ACM are confidential.

It is not common to contact the ACM for pre-notification discussions in relatively uncomplicated cases. Such cases are usually notified without prior contact.

3.10 Requests for Information During Review Process

It is not common for the ACM to request information from the parties in Phase I if there is no overlap of activities. If there is, the ACM regularly sends formal information requests to the parties. Such formal requests suspend the waiting period of four weeks until all the questions have been fully answered. The ACM may also informally request further information, which means the delay of four weeks is not suspended.

In Phase II, the waiting period may also be suspended by information requests from the ACM. Such suspension is (in contrast to Phase I) not automatic and the ACM must set a deadline for the parties to comply with its information request (Article 4:5(1)(c) General Act on Administrative Law).

3.11 Accelerated Procedure

There are no official short-form, fast-track or other types of accelerated procedures available for review. However, the ACM generally accepts that no market information needs to be submitted if the parties can demonstrate that there are no horizontal or vertical overlaps between their activities under any possible market definition. Furthermore, the ACM usually adopts a short-form decision in cases where there are no major competition concerns. The majority of cases are cleared through such short-form decisions.

The ACM may be willing to accelerate its review in uncomplicated cases if the parties can demonstrate that there is a clear need for a shorter procedure (eg, due to financial difficulties of the target).

4. Substance of the Review

4.1 Substantive Test

The ACM may refer a concentration to Phase II if it has reason to assume that the concentration may appreciably impede effective competition in (a part of) the Dutch market, in particular, as a result of the creation or strengthening of a dominant position. The ACM will issue a clearance decision in Phase I if such reasons are absent.

A permit shall be refused in Phase II if, as a result of the concentration, effective competition in (a part of) the Dutch market would be appreciably impeded, in particular, as a result of the creation or strengthening of a dominant position. The ACM will issue a permit if this is not the case.

4.2 Markets Affected by a Transaction

The ACM takes both horizontally and vertically affected markets into consideration. A market is horizontally affected if the economic activities of the parties overlap. A market is vertically affected if a party is active in a product market that is upstream or downstream from a product market in which any other party to the concentration is engaged. In determining the relevant market, the ACM will first define the product market and subsequently the geographic market:

a relevant product market comprises all those products and/or services which are regarded as interchangeable or substitutable by the consumer by reason of the products’ characteristics, their price and their intended use; and

a relevant geographic market comprises the area in which the firms concerned are involved in the supply of products or services and in which the conditions of competition are sufficiently homogeneous.

Dutch competition law does not provide for a de minimis level below which competitive concerns are deemed unlikely. However, only in exceptional cases will concentrations with combined market shares below 30% in horizontal relationships and market shares below 30% at each level of the distribution chain give rise to closer scrutiny.

4.3 Case Law from Other Jurisdictions

In general, the ACM will rely on precedents (and, in particular, market definitions) of the European Commission, but is under no obligation to do so.

4.4 Competition Concerns

The ACM may investigate unilateral, conglomerate, portfolio and vertical effects, and the elimination of (potential) competition, in its assessment of whether the concentration appreciably impedes effective competition in (a part of) the Dutch market. In general, it will do so in accordance with the European Commission’s Guidelines on horizontal (OJ 2004/C 31/5) and non-horizontal mergers (OJ 2008/C 265/6).

4.5 Economic Efficiencies

The ACM usually applies the European Commission’s Guidelines on horizontal mergers (OJ 2004/C 31/5) and as a consequence, the ACM may also take efficiencies into consideration since these can increase competitiveness within a market (paragraphs 76-88 of the Guidelines). However, the Guidelines require that efficiencies must be:

to the benefit of consumers;

a direct consequence of the envisaged concentration (they cannot be achieved by less anti-competitive alternatives); and

verifiable.

There are no recent precedents because the ACM has accepted an efficiency defence on only one occasion in 2009, and then only in combination with a remedy (decision of 25 March 2009, Ziekenhuis Walcheren/Oosterscheldeziekenhuizen, case 6424).

4.6 Non-competition Issues

The ACM is not allowed to take non-competition aspects into account as part of its review process. However, if the ACM refuses to grant a permit, the parties may ask the minister of economic affairs to grant a permit in a Phase III review. In such a review, the minister will assess whether any important reasons of public interest outweigh the expected impediment to competition.

The Phase III proceeding is laid down in Article 47 of the Competition Act.

4.7 Special Consideration for Joint Ventures

The substantive test described above also applies in relation to the creation of a full-function joint venture. No special consideration is given to joint ventures with regard to the substantive test applied.

In applying the substantive test to joint ventures, the ACM will also take into account whether or not the concentration may lead to a co-ordination of market conduct between the parent companies of the joint venture.

5. Decision: Prohibitions and Remedies

5.1 Authorities’ Ability to Prohibit or Interfere with Transactions

The ACM may prohibit a concentration under its jurisdiction after a Phase II investigation.

The ACM will issue a decision declaring that a permit is required for the concentration if it has reason to assume that the concentration could lead to a significant impediment of competition in (a part of) the Dutch market. The parties are not (yet) allowed to implement the concentration should this be the case. However, the ACM may also attach conditions and obligations to a decision declaring that no permit is required in relation to the concentration.

The ACM will grant a permit in Phase II if it concludes that the concentration does not lead to a significant impediment of competition in (a part of) the Dutch market. The ACM may attach conditions and obligations to its permit. If it reaches the opposite conclusion, the ACM will refuse the permit. In such cases, the concentration will be prohibited.

5.2 Parties’ Ability to Negotiate Remedies

It is possible for the parties to offer remedies in Phase I and Phase II.

5.3 Legal Standard

The Competition Act does not provide for a specific legal standard that remedies must meet in order to be deemed acceptable. The remedies should, of course, address the theory of harm.

In 2007 the ACM issued its 'Remedies Guidelines' (Richtsnoeren Remedies), which are closely modelled on the European Commission’s Notice on Remedies (OJ 2008/C 267/1). These guidelines address both the procedural and substantive aspects of remedies.

5.4 Typical Remedies

The ACM makes a distinction between structural and behavioural remedies. A structural remedy, such as the divestment of a business unit, causes a structural change to the market. Pursuant to a behavioural remedy, the merged entity will be obliged to behave, or be prohibited from behaving, in a certain manner prescribed by the remedy (eg, granting third parties access to certain infrastructures under FRAND conditions, keeping its prices below a certain level etc). The ACM generally prefers structural over behavioural remedies.

The ACM may not take non-competition aspects into consideration as part of its review process and, as such, remedies are not required to address non-competition issues.

5.5 Negotiating Remedies with Authorities

The parties may themselves propose remedies at any stage of the proceedings. Remedies are often proposed after the ACM has informed the parties of its competition concerns. In Phase II proceedings, this usually takes the form of a formal statement of objections (punten van overweging). Remedies may also be discussed with the ACM as early as in pre-notification discussions.

The ACM may not propose remedies on its own motion. The initiative of proposing remedies must come from the undertakings.

Generally a ‘state of play’ meeting is held with the ACM after it has informed the parties of its competition concerns. In Phase I, the parties may also request a suspension of the waiting period once, in order to prepare remedies. Remedies must be submitted in writing at least one week before the expiration of the waiting period in Phase I. In Phase II, remedies must be submitted at least three weeks before the expiration of the waiting period. The ACM will subsequently market-test the remedies proposed by the parties.

5.6 Conditions and Timing for Divestitures

In the case of divestitures, there is a difference between fix-it-first remedies (the concentration may only be implemented following divestiture) and remedies by which the parties are obliged to divest the activities concerned within a given timeframe. In this latter instance, the parties may already implement the main concentration following clearance, if the activities to be divested are placed under the supervision of a trustee approved by the ACM. If the activities are not divested within this timeframe, the trustee will organise an auction at which these activities will be sold at no minimum price.

Approval of the purchaser of the divestiture package by the ACM is a condition that is attached to all divestiture remedies. The ACM will reject a purchaser if the identity of the proposed purchaser raises prima facie competition concerns, or where the ACM believes that the proposed purchaser does not have the resources to maintain the divestiture package as a serious competitor to the merged entity. In some cases, the ACM may demand a fix-it-first remedy. In particular, the ACM will require a fix-it-first remedy if it has doubts as to whether a suitable purchaser can be found for the remedy package.

If remedies are not fully complied with, the ACM may impose a fine of up to EUR900,000 or 10% of an undertaking’s group turnover, whichever is higher.

5.7 Issuance of Decisions

A formal decision (permitting or prohibiting the notified transaction) is always issued to the parties involved.

The ACM publishes public versions of all its merger decisions. Business secrets are omitted from these public versions. The ACM also usually issues one-page short-form decisions in unproblematic Phase I transactions that are highly unlikely to contain any business secrets.

5.8 Prohibitions and Remedies for Foreign-to-foreign Transactions

There are no recent examples of foreign-to-foreign transactions in which remedies were required.

6. Ancillary Restraints and Related Transactions

6.1 Clearance Decisions and Separate Notifications

A clearance decision will only cover ancillary restraints if this is expressly requested by the parties involved. No separate notification is required, or possible, in relation to ancillary restraints.

7. Third-party Rights, Confidentiality and Cross-border Co-operation

7.1 Third-party Rights

Interested third parties (belanghebbenden) that are directly concerned by the proposed concentration have the right to submit observations to the ACM during the review process. The ACM may also contact third parties (eg, customers, competitors, suppliers and trade associations) in the context of its market investigation.

In addition to the right to submit observations, interested third parties have the same rights of appeal as the undertakings concerned. In Phase II cases, interested third parties are also granted access to the ACM’s case file.

7.2 Contacting Third Parties

The ACM may contact interested third parties (eg, customers, competitors, suppliers and experts) out of its own motion, for example, during its market investigation or when market-testing proposed remedies. It is unlikely that the ACM will contact third parties in unproblematic transactions (in particular, in cases without overlap of activities between the parties or where the parties have a very low combined market share).

The ACM usually approaches third parties by telephone, written questionnaire, and/or by e-mail.

7.3 Confidentiality

Pre-notification discussions with the ACM are confidential and the ACM does not publish any information regarding such discussions. The receipt of a notification and the receipt of a request for a permit (together with a short description of the undertakings concerned and a description of the proposed transaction) is announced by the ACM in the state journal and on its website.

The ACM will ensure that (genuine) business secrets are kept confidential.

7.4 Co-operation with Other Jurisdictions

The ACM is a member of the European Competition Network (ECN) and the International Competition Network (ICN). It co-operates with other competition authorities with respect to general policy matters as well as in the context of specific transactions. The ACM is not obliged by law to ask for permission from the parties concerned to share information with other jurisdictions, but in its 'Best practices on merger control rules' (Spelregels bij concentratiezaken), the ACM observes that it will normally liaise with the parties about the exchange of information.

8. Appeals and Judicial Review

8.1 Access to Appeal and Judicial Review

Both in Phases I and II the parties have the right of appeal in relation to the ACM’s decisions. Appeals must be lodged with the administrative law section of the District Court of Rotterdam (Rechtbank Rotterdam – Sector Bestuursrecht), with the possibility of a further appeal for the parties and the ACM to the Trade and Industry Appeals Court (College van Beroep voor het Bedrijfsleven) in The Hague.

8.2 Typical Timeline for Appeals

An appeal must be lodged within six weeks of the ACM's decision. It is possible to submit the reasoning for the appeal at a later stage. The competent court will, in such cases, set a time limit within which grounds for the appeal must be submitted.

An example of a successful appeal against one of the ACM’s merger control decisions was the annulment in 2016 by the Trade and Industry Appeals Court of a decision made bythe ACM in which it prohibited a concentration in the biscuit industry (ECLI:NL:CBB:2016:23).

8.3 Ability of Third Parties to Appeal Clearance Decisions

Third parties have the same right of appeal as the undertakings concerned if they qualify as interested parties (belanghebbenden) under Dutch law. To date, however, there have been no successful appeals in which third parties have challenged an ACM clearance decision.

9. Recent Developments

9.1 Recent Changes or Impending Legislation

As indicated in 1.2 Legislation Relating to Particular Sectors, certain concentrations in the healthcare sector also require the prior approval of the Dutch Healthcare Authority. There is a bill pending pursuant to which, the ACM will become the competent authority in relation to this procedure as well.

9.2 Recent Enforcement Record

Although the ACM has imposed fines in the past for infringements of the standstill obligation, we are unaware of any decisions in this regard since 2013.

In recent years, the ACM has prohibited a concentration between hospitals (2015, Stichting Albert Schweitzer Ziekenhuis/Rivas Zorggroep, case 14.0982.24) and a concentration in the biscuit industry (2012, Bolletje/Continental Bakeries, case 7321). The latter prohibition decision was, however, later annulled in court (ECLI:NL:CBB:2016:23).

The ACM has imposed remedies in a substantial number of cases, for example in 2016 in Brocacef/Mediq (case 15.0849.24).

The ACM has no (known) enforcement record for imposing fines or remedies in relation to foreign-to-foreign transactions or for prohibiting foreign-to-foreign transactions. It must, however, be observed that it has the power to do all of the foregoing in relevant cases that come under its jurisdiction.

9.3 Current Competition Concerns

In the past, the ACM was criticised by politicians for being too permissive in allowing concentrations between healthcare providers. In December 2017, the ACM produced a research paper which indicated that many hospitals that had merged in the past few years had raised their prices. The ACM therefore announced that it would be stricter on future mergers in the hospital sector and published a paper in which it outlined how it would assess concentrations between hospitals (Werkwijze analyse productmarkten in de MSZ). The ACM now scrutinises all cases in this sector very closely, even if these do not raise serious competition issues at first sight.

The notification of concentrations in the healthcare sector can be very time-consuming for this reason. This critical approach towards healthcare mergers is evidenced by the fact that the only two decisions in Phase II merger applications that the ACM adopted in 2017 related to the healthcare sector. In 2018, a concentration between healthcare providers was also referred to and cleared in Phase II. These cases were as follows:

in Parnassia/Antes, the ACM granted a permit because the parties offered a divestment remedy in relation to their capacity for ambulant specialised mental healthcare and forensic mental healthcare (decision of 12 June 2017, case 15.1259.24);

in AMC/VUmc, a merger between Amsterdam’s two teaching hospitals, the concentration was eventually unconditionally cleared in Phase II. Based on more reliable data, the ACM concluded that the combined market share of the parties was significantly lower than initially expected in Phase I. In addition, the ACM stated that regular non-teaching hospitals are equal competitors of the parties for most types of treatments (decision of 5 September 2017, case 17.0166.24); and

in Bergman Clinics/NL Healthcare Clinics, the ACM unconditionally cleared a merger between two independent healthcare treatment centres in a Phase II decision, because the activities of the parties only overlap in a couple of geographical regions in which patients will continue to have sufficient choice after the merger (decision of 17 December 2018, case 18.0337.27).

Loyens & Loeff

Law and Practice

Authors

Loyens & Loeff
is a legal and tax partner to its clients in its home markets of the Netherlands, Belgium, Luxembourg and Switzerland. Its 900 advisers are based at the firm's offices in Benelux and Switzerland, as well as in key financial centres around the world. A full-service practice with specific sector experience and a thorough understanding of the market, its advisers offer clients informed and tailored solutions. The Loyens & Loeff EU competition team consists of approximately 30 specialised lawyers (partners, counsels and associates) who combine pragmatic advice with in-depth knowledge of the sectors of competition law in which they are active, while taking into account their clients’ business objectives. The firm's EU competition team provides fully integrated legal services.

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